In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-1287

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

CARL A. GEE,

Defendant-Appellant.

____________

Appeal from the United States District Court

for the Eastern District of Wisconsin.

No. 03-CR-259—Rudolph T. Randa, Chief Judge.

____________

ARGUED DECEMBER 7, 2005—DECIDED DECEMBER 23, 2005

____________

Before EASTERBROOK, MANION, and SYKES, Circuit

Judges.

EASTERBROOK, Circuit Judge. Opportunities Industrialization Center of Greater Milwaukee (OIC)—an organization affiliated with the self-help movement founded in 1964

by Rev. Leon H. Sullivan in Philadelphia—holds contracts

to administer Wisconsin’s welfare-reform program, popularly known as W-2 (for “Wisconsin Works”). These contracts bring in about $40 million annually, approximately

two-thirds of OIC’s revenue. A jury concluded in this

criminal prosecution that Carl Gee had conspired with Gary

George and Mark Sostarich to obtain these contracts

corruptly. Gee caused OIC to pay kickbacks to George, who

at the time was the majority leader of Wisconsin’s state
2 No. 05-1287

senate. The kickbacks violated 18 U.S.C. §666 because OIC

receives more than $10,000 annually in federal grants (W-2

is itself about 80% federal money), and the agreement

among Gee, George, and Sostarich to violate §666 in turn

violated 18 U.S.C. §371, the general conspiracy statute. Gee

has been sentenced to 24 months’ imprisonment and

ordered to pay restitution of some $473,000. George pleaded

guilty to the §371 charge, and we have affirmed his conviction and sentence of 48 months’ imprisonment, though we

directed the district court to revisit George’s obligation to

make restitution. See United States v. George, 403 F.3d 470

(7th Cir. 2005). Sostarich pleaded guilty to a different conspiracy with George, agreed to cooperate (he testified

against Gee), and was sentenced to make restitution, serve

home confinement but no imprisonment, and perform

community service; he did not appeal.

The evidence permitted a jury to find that Gee caused

OIC to pay George for his assistance in directing the

welfare-program-management contracts to OIC and preventing the state from auditing OIC’s performance. Money

passed from OIC to George in two ways. First, OIC gave

Sostarich a monthly retainer, 80% of which he made over to

George (often after one of George’s aides picked up the

check from OIC, delivered it to Sostarich, and waited while

he made out a personal check to George for his cut). George

never performed any legal work in exchange for this money;

neither OIC nor Sostarich filed tax documents showing how

the monthly fee had been divvied up. Second, OIC “invested” $200,000 of an affiliate’s money in a corporation,

controlled by George’s family, whose sole asset was a TV

station in the Virgin Islands. Although Gee told the affiliate

that it would receive 20% of the corporation’s stock, no

certificates were issued and the “investment” never appeared on the corporation’s books. The money seems to have

gone straight to George’s pocket, with OIC receiving his

goodwill and political patronage rather than an equity

interest in a business.
No. 05-1287 3

Gee contends that this evidence does not support the

conviction. He offers three principal arguments. One is that

the $200,000 came from OIC’s profits and bonuses

for administering the W-2 program rather than from

any federal grant. This argument supposes that §666

reaches only funds that can be traced directly to the grant.

The Supreme Court rejected an identical argument in Sabri

v. United States, 541 U.S. 600 (2004), as we had done

earlier in United States v. Grossi, 143 F.3d 348 (7th Cir.

1998). Gee never mentions either of these decisions.

Another argument is that the evidence does not establish any specific act that George took in response to any

specific payment. Gee contends that the absence of a quid

pro quo prevents conviction. Yet the statute does not

require any such link. A quid pro quo of money for a specific

legislative act is sufficient to violate the statute, but it is

not necessary. It is enough if someone “corruptly solicits or

demands for the benefit of any person, or accepts or agrees

to accept, anything of value from any person, intending to

be influenced or rewarded in connection with any business,

transaction, or series of transactions of such organization,

government, or agency involving any thing of value of

$5,000 or more”. 18 U.S.C. §666(a)(1)(B). A sensible jury

could conclude that George had this corrupt intent, and that

Gee and Sostarich conspired with George to carry out a plan

in which federal money in OIC’s hands was exchanged for

George’s influence. See United States v. Agostino, 132 F.3d

1183, 1190 (7th Cir. 1997).

Finally, Gee observes that George was in the legislative

rather than the executive branch of Wisconsin’s government, which awarded W-2 contracts, and contends that

he therefore “had no power or authority to influence; he did

nothing to ‘merit’ a reward.” This confuses influence with

power to act unilaterally. A legislator with the ability to

control the senate’s agenda can throw a monkey wrench

into a Governor’s program, and this power confers influence
4 No. 05-1287

over executive decisions even when the legislature does not

pass any particular law. The absence of new laws may show

the successful application of influence. One does not need to

live in Chicago to know that a job description is not a

complete measure of clout. The evidence permitted a

reasonable jury to find that George had plenty of clout and

used it to OIC’s benefit, for which he was well paid.

Gee does not contest the length of his prison sentence but

does complain about the restitution. The principal problem

that led to the remand in George was our inability to

discern what the award represents. Here, as in George, the

district judge failed to explain his decision; but this time it

is easy to see where the numbers come from. The award

equals $200,000 (the “investment” in George’s business)

plus 80% of Sostarich’s retainer. That’s exactly what the

victim lost and thus is an appropriate award under 18

U.S.C. §3663A. Although George notes that the victim in a

prosecution under §371 is the United States, OIC is a proxy

for the federal interest because it was a recipient of federal

funds that were designated for a particular use. Restoring

this money to OIC will enable it to carry out the federal and

state welfare programs with the full resources that the

contracts provided originally. Sostarich actually provided

legal services, but he was willing to do this for only 20% of

the retainer. Had funds not been diverted to George, OIC

could have saved the difference. It is entitled to restitution

of that difference, and its entitlement to a return of the

$200,000 is straightforward.

AFFIRMED
No. 05-1287 5

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—12-23-05